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Chinese Stock Market Performance and Natural Disasters

Author

Listed:
  • Whelsy Boungou

    (PSB - Paris School of Business - HESAM - HESAM Université - Communauté d'universités et d'établissements Hautes écoles Sorbonne Arts et métiers université)

  • Melchisedek Joslem Ngambou Djatche

    (Faculté de Droit, Economie et Gestion de l’université d’Angers.)

  • Nicholas Biekpe

    (University of Cape Town)

Abstract

In this article, we investigate the impact of natural disasters on Chinese stock market performance over the period from 2017 to 2023. Using monthly financial data from 2,117 Chinese companies and climate data relating to floods and storms, our results highlight a negative association between stock market returns and natural disasters. We observe that the recurrence of natural disasters reduces the stock market returns of Chinese companies. We also find that, whatever the intensity of the natural disaster (number of deaths and people affected) and the company's sector of activity, the observed effect is verified. Our results also show that firms' Environmental, Social, and Governance (ESG) performance influences their exposure to natural disasters. We find that firms with higher ESG scores perform better despite natural disasters than other firms. This article thus provides the first detailed evidence of Chinese firms' exposure to natural disasters. JEL Codes: G12, G32, Q40

Suggested Citation

  • Whelsy Boungou & Melchisedek Joslem Ngambou Djatche & Nicholas Biekpe, 2025. "Chinese Stock Market Performance and Natural Disasters," Post-Print hal-05095168, HAL.
    • Handle: RePEc:hal:journl:hal-05095168
    DOI: 10.1177/09726527251318132
    as

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    More about this item

    Keywords

    Natural disaster; stock market; ESG; China;
    All these keywords.

    JEL classification:

    • G12 - Financial Economics - - General Financial Markets - - - Asset Pricing; Trading Volume; Bond Interest Rates
    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
    • Q40 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - General

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